A trustee for the Appliance Traders Limited (ATL) group pension scheme yesterday gave evidence that contradicts a section of the witness statement given by ATL boss Gordon 'Butch' Stewart in the billion-dollar fraud trial of three former executives.
The testimony by Claudette McLeish, who is also the former financial controller for Gorstew Limited - Stewart's holding company and the founding company for the scheme - came during cross-examination by defence attorney K. D. Knight.
Knight read from Stewart's statement in which the ATL chairman asserted that he "explained to Mr [Patrick] Lynch [former chairman of the pension scheme and one of the executives on trial] that I felt strongly that by investing the employees' surplus, I could make more money for them than they would receive by the said surpluses [being] distributed into their accounts".
"Do you agree that with the best will in the world, it could not happen like that?" Knight questioned.
"Mr Stewart could not have made that investment. He would have to recommend to the board [of trustees for the pension scheme] that investment opportunity," McLeish responded.
"And am I correct that the board need not accept his recommen-dation?" Knight pressed.
"Correct," she replied.
"And am I correct that the withdrawal surplus could not be given to Mr Stewart to invest as he sees fit?" the defence attorney continued.
"No, sir," McLeish replied.
Lynch, along with Catherine Barber, the former general manager of the pension scheme, and Dr Jeffrey Pyne, the former managing director of Stewart's holding company Gorstew Limited, are on trial for allocating net and withdrawal surpluses totalling $1.7 billion to members of the scheme without Gorstew's consent and allegedly using forged letters to deceive Stewart that consent had been obtained.
"Are you saying that even if Mr Stewart himself could have invested the net withdrawal surplus and get a higher return, the trustees couldn't give him the money?" Knight continued.
"The trustees couldn't give him the money, sir," McLeish.
However, an attorney for the pension scheme gave evidence that she had advised Barber, in a July 2007 letter, that the trust deeds and rules that were in place in 1995 required Gorstew's consent for the allocation of surpluses.
Lynda Mair, who is a partner in the law firm Patterson, Mair and Hamilton, said she gave her advice after Barber wrote to her indicating that she was uncertain whether consent was required.
Mair testified that after reviewing several documents sent to her by Barber, including the trust deed that was in place in 1995, "I wrote a letter to Ms Barber and advised her that the consent of Gorstew was required."